Apple explains iPhone 4 antenna issue, promises free cases for users

Apple CEO Steve Jobs apologized to iPhone 4 users affected by reported reception problems with the phone and offered free cases which will solve concerns about dropping signals when some users hold the phone.

But Jobs stopped short of saying the issue, dubbed Antennagate, was a problem particular to the iPhone 4. He steadfastly said the iPhone 4 was just like any other phone and is prone to signal degradation when held in certain areas. And he said only a very small minority of users are experiencing problems with the iPhone 4.

In a candid and lengthy press conference at Apple’s Cupertino headquarters, he said the issue with the iPhone 4 is that its signal vulnerability is more obvious to users because of the phone’s antenna, which is built into the steel band around the device. But he said the iPhone 4 has only one more dropped call per hundred than its predecessor, the iPhone 3GS.

Much of the furor about the subject, he said, was overhyped by tech sites and blogs. And he suggested that Apple has become an easy target for some because of its success.

But despite that, he said Apple is committed to serving its customers and ensuring their concerns are met.

The free bumpers will be available to anyone who purchases an iPhone prior to Sept. 30, when Apple reassesses the issue. New customers will either receive a case at purchase or they’ll be able to pick one from a selection online. Existing users who have not bought a case will also be able to pick out a protective shell, from a selection that includes Apple’s own bumper case or other third-party units.

For customers who previously bought an Apple bumper case, they will receive a rebate. However, customers who bought another case will not get a refund.

It’s unclear how quickly the new cases will go out.

Jobs said even with the negative publicity, the phone is Apple’s most successful launch with well over 3 million units sold in 22 days. The return rate on the phone at AT&T stores is 1.7 percent, about a third of the rate for the iPhone 3GS. And only .55 percent of customer calls to AppleCare have been about reception issues.

The issue has been a hot topic for Apple and threatened to stifle some of the momentum of the iPhone, Apple’s biggest business. While reports of the signal sensitivity were present from almost day one, it appeared a Consumer Reports review on Monday threw the debate into another gear. The magazine confirmed the iPhone 4 is vulnerable to signal degradation when held in the bottom left corner, a problem it couldn’t replicate on other phones.

It’s unclear if this will kill the controversy over the antenna. But most analysts I spoke with afterward said it should do the trick with consumers and Apple investors will be happy as well that the question has been adequately addressed.

This has been a big test for Apple, which Jobs said takes criticism of its products personally. He said the company has been working late hours to come up with data to present to the public.

So what do you think? Does this solve the problem? Is Apple’s explanation enough? Will this get prospective buyers any more interested in the iPhone 4?

(For more details on this morning’s press conference, read the play-by-play.)